4th Look at Local Housing Markets in December

California Home Sales down 44% YoY in December; Prices Down 2.8% YoY

This is the fourth look at local markets in December. I’m tracking about 40 local housing markets in the US. Some of the 40 markets are states, and some are metropolitan areas. I’ll update these tables throughout the month as additional data is released.

Lawler: Early Read on Existing Home Sales in December

From housing economist Tom Lawler:

Based on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 3.96 million in December, down 3.2% from November’s preliminary pace and down 35.0%% from last December’s seasonally adjusted pace. Sales on an unadjusted basis should show a slightly larger YOY decline. On an unadjusted basis the YOY % decline in sales was once again the largest in the West.

The National Association of Realtors (NAR) is scheduled to release December existing home sales on Friday, January 20, 2023, at 10:00 AM ET. The consensus is for 3.95 million SAAR.

California Home Sales Down 44% YoY in December, Prices Decline 2.8% YoY

In November, California home sales were down 47.7%.

California doesn’t report monthly inventory numbers, but they do report the change in months of inventory. Here is the press release from the California Association of Realtors® (C.A.R.): Interest rate reprieve bolsters December home sales, C.A.R. reports

• Existing, single-family home sales totaled 240,330 in December on a seasonally adjusted annualized rate, up 1.1 percent from November and down 44.1 percent from December 2021.

• December’s statewide median home price was, $774,580 down 0.4% percent from November and down 2.8% percent from December 2021.
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A short respite in rising interest rates helped edge up California home sales in December to break a three-month sales decline but still remained below the 250,000 level for the second straight month, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 240,330 in December, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2022 if sales maintained the December pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales. December’s sales pace was up 1.1 percent on a monthly basis from 237,740 in November and down 44.1 percent from a year ago, when 429,860 homes were sold on an annualized basis.

“It’s encouraging to see an uptick in December’s home sales as buyers took advantage of a slightly more favorable lending environment that provided them with a window of opportunity to enter the California housing market,” said C.A.R. President Jennifer Branchini, a Bay Area REALTOR®. “As buyers and sellers gradually adapt to the new normal, we are seeing a shift toward a more balanced market. With both sides slowly adjusting their expectations, it’s hopeful that we’ll see sales ratcheting higher as market conditions improve further throughout 2023.” 

California’s median home price remained on a downward trend for the fourth straight month and has been down on a monthly basis for six of the last seven months. December’s median price of $774,580 was down 0.4 percent from the $777,500 recorded in November. December’s price also was lower on a year-over-year basis for the second consecutive month, declining 2.8 percent from the $796,570 recorded last December. For 2022 as a whole, California’s median home price increased 4.5 percent from 2021’s $786,750 figure but is expected to decline by 8.8 percent in 2023.
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• Housing inventory in California continued to rise from the previous year but dipped on a month-to-month basis as the year came to an end. The statewide Unsold Inventory Index (UII) was more than double the 1.2 months recorded in December 2021 but was down from the 3.3 months registered in November.

emphasis added

Active Inventory in December

Here is a summary of active listings for these housing markets in December.

Inventory in these markets were down 30% YoY in January 2022 and are now up 81% YoY! So, this is a significant change from early in 2022, and a larger YoY inventory increase than in November (up 71% YoY).

Notes for all tables:

1. New additions to table in BOLD.

2. Northwest (Seattle), Santa Clara (San Jose), Jacksonville, Source: Northeast Florida Association of REALTORS®

3. Totals do not include Atlanta, Denver or Minneapolis (included in state totals)

   

New Listings in December

And here is a table for new listings in December. For these areas, new listings were down 22.1% YoY. Potential sellers that are locked into their current homes with low mortgage rates has pushed down new listings.

Last month, new listings in these markets were down 18.9% YoY.

Closed Sales in December

Here is a table comparing the year-over-year Not Seasonally Adjusted (NSA) declines in sales this year from the National Association of Realtors® (NAR) with the local markets I track. So far, these measures have tracked closely, and the preliminary data below suggests a sharp decline in sales in December.

Sales in some of the hottest markets are down around 40% YoY (all of California was down 44.1%), whereas in other markets, sales are only down in around 20% YoY.

In December, sales were down 37.8%. In November, these same markets were down 38.1% YoY Not Seasonally Adjusted (NSA).

This is a similar YoY decline as in November for these markets. If national sales decline by the same percent as last month, the NAR will report sales for December under 4.0 million SAAR - below the 4.01 million in May 2020 (pandemic low) and the lowest sales rate since 2010.

More local markets to come!